Homeowners With This Factor in Common Are More Likely To Sell Right Now
Written by
Josephine Nesbit
Edited by
Nicholas Morine
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
After reaching historic lows at the end of 2020, mortgage rates have more than doubled. Homeowners with lower interest rates feel “locked-in” to their current home, as moving and selling would likely increase their monthly mortgage payment, but a new report found the number that motivates them to sell.
A June survey of 1,815 homeowners from Zillow found that homeowners with mortgage rates of 5% and higher were twice as likely to say they plan to sell their home within the next three years as compared to those with rates under 5%. Of the homeowners who reported plans to sell, 47% of those paying a mortgage rate over 5% already have their house listed for sale — compared to 20% of homeowners with lower rates.
Additionally, the Zillow report noted that the greatest divide is between homeowners reporting a 4%-4.99% and a 5%-5.99% rate. Approximately 41% of homeowners with a rate between 5%-5.99% reported an interest in selling, while only 26% of those at 4%-4.99% said the same.
Zillow indicated that around 90% of mortgage holders have a rate less than 6%, 80% of mortgage holders reported having a rate under 5%, and almost one-third reported a rate under 3%. Freddie Mac’s Primary Mortgage Market Survey suggested that the average rate for a 30-year fixed-rate mortgage hovers just below 7%, which means most mortgage holders would pay a much higher rate than their current mortgage if they decide to sell.
Mortgage rates aren’t the only factor in a homeowner’s decision to sell. Less than half (42%) of all homeowners considering selling said that recent rate changes were why they decided to move. However, homeowners with higher mortgages (65%) were more likely to report rates as one of their reasons to sell as compared to homeowners with lower rates (35%).
The recent increase in mortgage rates pushed the median monthly mortgage payment to $2,192 for the typical existing single-family home, according to Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors. This isn’t the best news for consumers looking to jump into the summer housing market, but if the Federal Reserve stops interest rate increases, Lautz said this could lower mortgage rates in the fall and winter months.
More From GOBankingRates
